Financial News http://www.wisebread.com/taxonomy/term/12009/all en-US Do These 8 Things to Profit From the Improving Economy http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/do-these-8-things-to-profit-from-the-improving-economy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/couple-buying-home-178728490-small.jpg" alt="couple buying home" title="couple buying home" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After several years of sluggish growth, it appears that the economy is getting better. Unemployment has dropped. The stock market has been setting record highs. But are you poised to take full advantage of the rebound? (See also: <a href="http://www.wisebread.com/8-ways-rising-interest-rates-can-help-your-wallet?ref=seealso">8 Ways Rising Interest Rates Can Help Your Wallet</a>)</p> <p>Here are eight ways to position yourself for the best result once the economy kicks into high gear.</p> <h2>1. Pay Off Debt</h2> <p>If the economy is getting better and you find yourself earning more, getting rid of debt should be your first priority. The last thing you want is to miss out on an economic boom because you're handcuffed by loans and credit card bills, so pay that stuff off. And do it fast, because a good economy often comes with higher interest rates. So if you have debt, it's best to rid yourself of it before it gets pricier to pay down later.</p> <h2>2. Spend Less</h2> <p>The flipside of higher interest rates is that you'll be making more on any money you have in your bank account. So there's an incentive to save now. What's more, you may be earning more in general during strong economic times, so you have the double whammy of stashing more money into those saving and retirement accounts, plus a higher return.</p> <h2>3. Pump Those Retirement Accounts</h2> <p>There's never a truly bad time to begin investing, especially if you have a long savings window. So get started now, before stock prices get too out of hand. Consider upping your 401(k) contribution. And if you have an IRA, you have until April 15 to make contributions that count toward 2014's tax bill.</p> <h2>4. Lock In Whatever Prices You Can</h2> <p>A good economy often comes with some inflation. So it might make sense to explore ways to secure long-term price stability on items or services you use frequently. Locking in a price on a cable or mobile phone bill might make sense, and you may even be able to lock in prices on electricity and other utilities.</p> <h2>5. Build Up Your Emergency Fund</h2> <p>If you are fortunate enough to have some extra money come your way, consider using it to build up your savings to protect yourself. Opinions vary on how much liquid cash you should have socked away, but at least three months of salary is a good rule of thumb.</p> <h2>6. Consider Buying That House</h2> <p>If interest rates do go up, mortgages could get pricier. So it may be wise to try and purchase a home now while rates are still historically low. If you've been on the fence about when to buy, now may be the time.</p> <h2>7. Ask for That Raise</h2> <p>When the economy was slow, employers were loath to give out pay raises. &quot;Times are tough, we've got to tighten belts,&quot; was the common response. Now, with things improving, it's harder for your boss to make the argument that you're not worth a bump in pay. If your organization has done well financially and you feel you've played a role in that, go ahead and ask for that increase.</p> <h2>8. Update Your Resume and LinkedIn Profile</h2> <p>If things are getting better, employers may starting looking for new hires. Take advantage of the situation by updating your online presence and doing what's necessary to look good to recruiters. If you stopped working during the downturn, maybe its time to get back into the workforce. If you hate your job, maybe now is when you find a better one. And if you like your job, it never hurts to build up your network and see what else is out there.</p> <p><em>Are you ready for a better economy? How do you plan to profit from it?</em></p> <a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy" class="sharethis-link" title="Do These 8 Things to Profit From the Improving Economy" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-weird-logic-of-economic-growth">The weird logic of economic growth</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-inflation">Why Inflation?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/another-path-to-recovery-higher-incomes">Another path to recovery: higher incomes</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-new-normal-economy">The new normal economy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peak-debt">Peak Debt</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News debt Economy employment growth income spending Mon, 08 Dec 2014 14:00:10 +0000 Tim Lemke 1264105 at http://www.wisebread.com 7 Weird Money Laws You May Have Broken http://www.wisebread.com/7-weird-money-laws-you-may-have-broken <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-weird-money-laws-you-may-have-broken" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/fortune-teller-459884341.jpg" alt="fortune teller" title="fortune teller" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Money can make people do strange things. But what about when money laws themselves are beyond comprehension?</p> <p>From bizarre tax systems at home to monarchy-imposed oddities abroad, the world is full of some very odd laws governing the spending and collecting of money. Lucky for you, this list of them is free.</p> <h2>1. Don't Step</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/stepping-money-494564415.jpg?ggnoads" alt="" /></p> <p>Thailand's king is featured prominently on all the country's currency. Thailand's king is also not to be criticized, under legal penalty. So by extension, Thailand has one of the stranger money laws around: stepping on money is considered extremely disrespectful, and crazily enough, <a href="http://voices.yahoo.com/how-not-arrested-thailand-doing-these-things-5584569.html">could land you in a Thai jail</a>.</p> <h2>2. Do the Running Man, Pay the Tax Man</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/grandpa-dj-177803763.jpg?ggnoads" alt="" /></p> <p>In Washington state, cover charges for movies, concerts, and theater are tax free. Unless, that is, the venue provides patrons with an &quot;<a href="http://www.futureofmusic.org/blog/2013/04/16/washington-state-dance-tax-has-venues-hands-and-feet-tied">opportunity to dance</a>&quot; (seriously), in which case tax must be paid. A holdover law from the 60s, the provision was largely forgotten about until recently, when one establishment was charged $25,000 for non-compliance.</p> <h2>3. Candy Pain</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/pretzel-154204881.jpg?ggnoads" alt="" /></p> <p>Buy a Twizzler in Kentucky and you're free from paying taxes. Buy a chocolate-coated pretzel, and you better keep that receipt. That's because their state law declares tax exempt <a href="http://xfinity.comcast.net/slideshow/finance-unusualsalestaxes/kentucky-candy-not-such-a-sweet-deal/">only those candies that don't contain flour</a>. Seems a little half-baked.</p> <h2>4. Canadian Currency Conundrum</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/counting-change-139247071.jpg?ggnoads" alt="" /></p> <p>Find it annoying when the person in front of you in line starts counting out pennies for their purchase? Well in Canada, you could have that person arrested. According to the <a href="http://www.factfixx.com/2011/08/09/weird-laws-paying-with-coins-in-canada/">Canadian Currency Act</a>, there are all sorts of legal restrictions on what you can and can't pay for with coins, including the illegality of using more than 25 pennies in any transaction.</p> <h2>5. Nay-Saying Sooth-Saying</h2> <p><img width="605" height="341" src="http://www.wisebread.com/files/fruganomics/u5123/fortune-teller-459884341.jpg?ggnoads" alt="" /></p> <p>For something weird you're not allowed to charge money for, how about <a href="http://www.mattmlaw.com/blog/2013/10/obscure-crimes-fortune-telling-is-illegal-in-pennsylvania.shtml">Pennsylvania&rsquo;s law against soliciting payment for fortune telling</a>? The misdemeanor is punishable by up to a year in jail, and extends to outlaw charging to place hexes or spells on people.</p> <h2>6. The Bagel Burden</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/bagel-121871835.jpg" alt="" /></p> <p>It's tough to walk down a New York City street without running into a bagel joint. But if you're looking to avoid being charged tax on one of those heavenly bread circles, make sure you do not, under any circumstances, ask for your bagel to be sliced. <a href="http://www.huffingtonpost.com/2010/08/25/bagel-tax-new-york_n_694361.html">As soon as the bagel is sliced</a> (or schmeared, for that matter!), it's considered prepared food, and can be taxed up to 9 cents.</p> <h2>7. Bavarian Bribes</h2> <p><img width="605" height="340" src="http://www.wisebread.com/files/fruganomics/u5123/bribe-488122455.jpg?ggnoads" alt="" /></p> <p>While most of this list features legal restrictions, this last law gets honorable mention (it was eliminated just a few years ago) for <em>helping</em> facilitate a strange financial transaction. Namely: bribery. German tax law, it turns out, actually allowed private companies to <a href="http://www.businessweek.com/stories/1995-08-06/germany-where-bribery-is-tax-deductible-intl-edition%20http://www.businessweek.com/stories/1995-08-06/germany-where-bribery-is-tax-deductible-intl-edition">write off the costs of bribery on their returns</a>.</p> <p>Though good luck dealing with the angry bribe recipients after listing their names on your receipts&hellip;</p> <a href="http://www.wisebread.com/7-weird-money-laws-you-may-have-broken" class="sharethis-link" title="7 Weird Money Laws You May Have Broken" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joe-epstein">Joe Epstein</a> of <a href="http://www.wisebread.com/7-weird-money-laws-you-may-have-broken">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/disneyland-on-the-sort-of-cheap">Disneyland on the (Sort of) Cheap</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/travel-and-money-using-your-debit-card-on-the-road">Travel and Money: Using Your Debit Card on the Road</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-frugal-ways-to-meet-and-stay-in-touch-with-people-around-the-world">14 Frugal Ways to Meet and Stay in Touch With People Around the World</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/free-and-cheap-things-to-do-in-seattle">Free and Cheap Things to Do in Seattle</a></span> </div> </li> </ul> </div> </div> </div> </div> Entertainment Financial News Travel finance laws laws money money laws weird Fri, 20 Jun 2014 21:12:04 +0000 Joe Epstein 1142576 at http://www.wisebread.com Clams, Cheese, and Bread: Why We Call Money What We Do http://www.wisebread.com/clams-cheese-and-bread-why-we-call-money-what-we-do <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/clams-cheese-and-bread-why-we-call-money-what-we-do" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/dollar-481331743-small.jpg" alt="dollar" title="dollar" class="imagecache imagecache-250w" width="250" height="137" /></a> </div> </div> </div> <p>Money. Sadly, it does make the world go around. There are around <a href="http://en.wikipedia.org/wiki/List_of_circulating_currencies">180 different</a> types of currency in the world, including the Albanian <em>lek</em>, the Haitian <em>gourde</em>, the Moroccan <em>dirham</em>, and the Zambian <em>kwacha</em>. But you are more likely to know the slang terms for the US dollar and the British pound than any of those. Do you know where those terms actually came from? Let's take a look.</p> <h2>Buck</h2> <p>We use it so often, most of us don't stop to think that the word <em>buck</em> has very little to do with the word <em>dollar</em>. There doesn't seem to be any correlation, anyway. Why do we use <em>bucks</em>, when <em>dollars</em> works just as well? It seems there are many theories surrounding the origin of buck. The most popular is that is derives from the word &quot;<a href="http://www.straightdope.com/columns/read/725/whats-the-origin-of-the-word-buck">buckskins</a>,&quot; which were a valuable form of currency when colonials were trading goods with Native Americans. For instance, a cask of whiskey would be worth five buckskins. Perhaps the terms &quot;bucks&quot; just stayed with us, even when deerskins have long since stopped being used as currency.</p> <h2>Quid</h2> <p>The natives of Britain commonly refer to the English pound as &quot;quid.&quot; Only someone trying to appear very formal would say &quot;pounds,&quot; when &quot;that'll be 20 quid&quot; is so much more acceptable. Where did <em>quid</em> come from though? Again, there is not one specific and definitive source, but two popular theories keep appearing in research documents. We know <a href="http://www.wisegeek.com/what-is-a-quid.htm">the word quid</a> has been around since the 1600s. The Latin term <em>quid pro quo</em> (something for something... remember Hannibal Lecter?) was widely used back then, and it could have easily been coupled with a monetary exchange. However, the fact that a site of the Royal Mint was in <em>Quidhampton</em>, Wiltshire, is also floated as a possible source.</p> <h2>Bread or Dough</h2> <p>We've all heard these terms, and they're especially popular in the UK. Many people suspect that the term came from the fact that bread is one of the most basic forms of food, and something we often used to rely upon for nutrition. &quot;Give us this day, our daily bread,&quot; from the Lord's prayer, for instance, could be taken literally or figuratively. The term <a href="http://www.etymonline.com/index.php?term=bread">breadwinner</a>, used commonly from the 1940s onwards, took this idea and ran with it. The term <em>bread</em> was directly tied with someone who earned money. From there, it's easy to see how <em>bread</em>, and subsequently <em>dough</em>, came into common usage. Then there's Cockney rhyming slang. The term &quot;bread and honey&quot; was used instead of money. But there's enough evidence to suggest that <em>bread</em> was used as a term for money before the Cockney's adopted it.</p> <h2>Clams</h2> <p>If something is going to set you back 75 <em>clams</em>, you know what you're going to be paying. A <em>clam</em> is one dollar. How on earth did that connection become established? The most popular answer to this question is that clamshells were once used as currency in different parts of the world. There is also evidence that Native Americans from the California region (the <a href="http://www.yosemite.ca.us/library/kroeber/miwok.html">Miwok people</a>) dealt in <a href="http://hearstmuseum.berkeley.edu/exhibitions/ncc/gallery_3_2_7.html">strings of clamshells</a> as currency, or for barter and trade.</p> <h2>Cheddar or Cheese</h2> <p>Although not related to any specific amount, people often refer to money as <a href="http://dictionary.reference.com/slideshows/money#cheddar"><em>cheddar</em></a>, or <em>cheese</em>. Ever wonder why? It appears to date back to the 1960s, when welfare and food stamp recipients were provided with a product called <a href="http://en.wikipedia.org/wiki/Government_cheese">government cheese</a>. It sounds about as appetizing as it probably was, as this processed product was made from surplus milk and different types of cheeses, blended with emulsifiers. Terms like &quot;you get your <em>cheese</em> yet?&quot; started to become synonymous with getting money from the government, not just processed cheese.</p> <h2>Sawbuck</h2> <p>Of all the terms on this list, the <em>sawbuck</em> is the easiest to explain. A sawbuck is another name for a sawhorse, which was originally fashioned by lashing two pieces of wood together to form an &quot;X.&quot; Some of the <a href="http://en.wikipedia.org/wiki/United_States_ten-dollar_bill">first US $10 bills had a large Roman numeral X (10)</a> printed on one side. It was from this simple visual cue that the <em>sawbuck</em> nickname was born.</p> <h2>Greenback</h2> <p>We know the term <em>greenback</em> as a generic term for dollars, but back in the mid-1800s, it was not a term of endearment. During the American Civil War, over <a href="http://www.investopedia.com/terms/g/greenback.asp">$400 million in legal tender</a> was printed to finance the conflict. But this money, printed green on one side, did not have the secure backing of gold and silver. Because of this, banks were reluctant to give customers the full value of the <em>greenback</em> dollar. Remember that next time you ask for 100 <em>greenbacks</em>; a history buff may just shortchange you. (By the way, our British readers may know the term from a very popular show from the eighties. Baron Greenback was the master villain that Danger Mouse often tried to overcome.)</p> <p><em>Know any other slang terms for US Dollars? Please share a few in comments!</em></p> <a href="http://www.wisebread.com/clams-cheese-and-bread-why-we-call-money-what-we-do" class="sharethis-link" title="Clams, Cheese, and Bread: Why We Call Money What We Do" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/clams-cheese-and-bread-why-we-call-money-what-we-do">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-weird-money-laws-you-may-have-broken">7 Weird Money Laws You May Have Broken</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/common-currency-a-primer">Common Currency: A Primer</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-ive-been-trying-to-say">What I&#039;ve been trying to say</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-george-w-bush-write-for-wisebread">Should George W. Bush write for Wisebread?</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News dollars money money names slang Tue, 17 Jun 2014 09:00:07 +0000 Paul Michael 1142935 at http://www.wisebread.com Why You Should Still Pay Attention to Bitcoin http://www.wisebread.com/why-you-should-still-pay-attention-to-bitcoin <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-should-still-pay-attention-to-bitcoin" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/bitcoin-467138313.jpg" alt="bitcoin" title="bitcoin" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>It might sound like something the Super Mario Brothers obsessively hoard, but <em>bitcoin</em> is a form of electronic currency that's worth real money. Little known and even less understood, bitcoin has been gaining steam on a global scale as digital commerce continues to dominate consumer practices. However, due to its early adoption on the black market and price volatility, bitcoin is seen as something of a financial urban legend. While bitcoin has a checkered past and uncertain future, it is being exchanged right now for real money. So the question remains, should you invest in this cryptocurrency? (See also: <a href="http://www.wisebread.com/heres-what-you-should-know-about-bitcoin?ref=seealso">Here's What You Should Know About Bitcoin</a>)</p> <p>Introduced in 2009, bitcoin emerged as a peer-to-peer payment method; digital cash that users could trade for goods and services. Because bitcoins can be exchanged without an intermediary (such as a bank) it has its share of supporters and naysayers, each citing advantages and flaws in the system.</p> <h2>Fixed Supply</h2> <p>Traditional currencies like the US dollar are subject to inflation and price manipulation; however, the value of bitcoin lies solely with those willing to use and accept it as payment. Simply put, bitcoin's worth is derived from the basic concept of supply and demand.</p> <p>The total number of bitcoins is fixed at 21 million; once all 21 million bitcoins have been &quot;<a href="http://www.coindesk.com/information/how-bitcoin-mining-works/">mined</a>,&quot; that's it. It is estimated that there are <a href="http://blockchain.info/charts/total-bitcoins">12.3 million bitcoins in circulation</a> and it will take <a href="https://en.bitcoin.it/wiki/Controlled_supply">until 2140</a> for all available bitcoins to be mined. Bitcoins are introduced into circulation via a complex mathematical algorithm designed such that it mirrors the behavior of commodities like gold (hence why folks who discover bitcoins are called miners).</p> <p>As more bitcoins are added into circulation, &quot;mining&quot; them becomes increasingly difficult. This self-propagating scarcity drives the value of each bitcoin up, provided the demand continues.</p> <h2>Small Transaction Fees</h2> <p>When bitcoin was introduced, virtually no reputable businesses had heard of it, much less accepted it as a form of payment. The anonymity and untraceable characteristics of the digital currency was seen as an advantage in some of the Internet's seedier recesses, and bitcoin found early adopters within <a href="http://lawstreetmedia.com/news/headlines/bitcoin-why-is-it-prone-to-criminal-activity/">questionable circles</a>.</p> <p>However, as bitcoin becomes mainstream, traditional businesses are opening up to the unconventional tender. While bitcoin hasn't asserted itself as the currency of choice with merchants, it can be spent on everything from <a href="http://www.digitaltrends.com/web/virtual-bitcoins-can-now-be-traded-for-dominos-pizza/">pizza</a> to <a href="http://mashable.com/2013/04/17/okcupid-bitcoin/">online dating</a>, and the <a href="http://www.coindesk.com/information/what-can-you-buy-with-bitcoins/">list is only getting longer</a>.</p> <p>Bitcoin's surge in popularity amongst traditional retailers can be attributed to the low cost of transaction fees. Credit card companies charge merchants fees to use their services, something that retailers have derided for years. Because bitcoin is traded like cash, the <a href="http://www.coindesk.com/bitcoin-transaction-fees-slashed-tenfold/">processing fees are small</a> when compared to more traditionally accepted methods of payment.</p> <p>The intrinsic value of any currency is judged primarily on the ability to spend it. As the number of businesses willing to accept bitcoin grows, so does its value.</p> <h2>Potential Adoption in Emerging Markets</h2> <p>With basic financial services difficult to access in the developing world, bitcoin offers a method of transaction unrestricted by geographically isolated financial institutions like banks.</p> <p>With <a href="http://www.ibtimes.com/more-70-emerging-market-internet-users-are-facebook-fb-twitter-twtr-1555333">Internet usage growing</a> in these emerging markets and bitcoin payment systems accessible via phone or PC, bitcoin may very well become the method of choice by which these regions conduct business. Not only is this <a href="http://www.policymic.com/articles/41561/bitcoin-price-2013-how-bitcoin-could-help-the-world-s-poorest-people">beneficial in terms of economic development</a> in these areas, but it also increases bitcoin demand, resulting in good things for those holding on to these digital dollars.</p> <h2>Lack of Security</h2> <p>Bitcoin (as well as <a href="http://altcoins.com/">other forms of digital currency</a>) is decentralized, meaning that there is no figure of authority that controls it (like a central bank). Consequently, end users are responsible for looking after their own bitcoins and, since they are intangible, you can't exactly make a withdrawal and stash them under your mattress.</p> <p>Bitcoins are stored in a digital &quot;<a href="http://www.coindesk.com/information/how-to-store-your-bitcoins/">wallet</a>&quot; that allows the user to access his or her bitcoins and spend them. Just as people fall victim to pickpockets and purse-snatchers, your digital wallet is not safe from cyber thievery. The wallet that manages bitcoins is safeguarded by nothing more than a password.</p> <p>There are <a href="https://bitcoin.org/en/secure-your-wallet"> multiple methods to secure</a> your hard earned digi-cash, however nothing is foolproof, as illustrated by <a href="http://gizmodo.com/the-6-biggest-bitcoin-heists-in-history-1531881137">multiple, near-catastrophic heists</a>. One of the largest bitcoin thefts occurred when the exchange known as Mt. Gox fell victim to hackers. Using stolen passwords, the hackers made fraudulent trades on the Mt. Gox exchange and accumulated nearly $500,000,000 worth of bitcoin. That's half a billion&hellip;with a 'b'. The true owners of these bitcoins were left with empty pockets and, because bitcoins are notoriously hard to trace, there is little hope that they will ever see reimbursement.</p> <p>As the value of bitcoin increases, so does the attention of criminals. Because bitcoin isn't backed by any bank or government, once your bitcoin is gone, it's not coming back. This makes bitcoin thieves a lot like Keyser Soze, a tap of the keys and a click of the mouse and just like that&hellip; poof. They're gone.</p> <h2>Status as Legal Tender</h2> <p>Bitcoin's impact on the global economy is subject to speculation and, as a result, most of the world's governments are keeping mum on how they <a href="http://www.forbes.com/sites/kashmirhill/2014/01/31/bitcoins-legality-around-the-world/">plan to treat it</a>. As a currency still very much in its infancy, the status of bitcoin as legal tender is questionable.</p> <p>The IRS recently proclaimed that <a href="http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html">bitcoin is property</a> and consequently must be declared come tax time. This adds <a href="http://www.forbes.com/sites/kashmirhill/2014/04/15/how-i-paid-my-bitcoin-taxes/">a level of complexity</a> that may impede bitcoin adoption, however many see this recognition as a step towards legitimizing bitcoin as a true method of payment.</p> <p>Many of bitcoin's most vocal critics claim that the <a href="http://www.bloomberg.com/news/2013-12-04/greenspan-says-bitcoin-a-bubble-without-intrinsic-currency-value.html">digital currency is inherently worthless</a> due to its decentralized nature. When the FBI shut down the online <a href="http://www.wired.com/2013/11/silk-road/">narcotic marketplace Silk Road</a>, the feds seized approximately $25 million worth of bitcoins, which they are now <a href="http://www.forbes.com/sites/kashmirhill/2014/01/16/the-feds-are-ready-to-sell-the-silk-road-bitcoin-kind-of/">gearing up to sell</a>.</p> <p>With the federal government preparing to get their piece of the bitcoin pie, it is becoming harder to refute the validity of bitcoin's worth. Bitcoin may not be backed by financial institutions or governments, but the basic principles of supply and demand have solidified its place as a legitimate commodity. After all, gold is just a rock in the ground, and money isn't worth the paper it's printed on.</p> <p><em>Do you own bitcoin? Have you considered it?</em></p> <a href="http://www.wisebread.com/why-you-should-still-pay-attention-to-bitcoin" class="sharethis-link" title="Why You Should Still Pay Attention to Bitcoin" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ryan-lynch">Ryan Lynch</a> of <a href="http://www.wisebread.com/why-you-should-still-pay-attention-to-bitcoin">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy">Do These 8 Things to Profit From the Improving Economy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/linking-to-wikileaks-will-hurt-chances-of-landing-federal-jobs">Linking to Wikileaks Will Hurt Chances of Landing Federal Jobs</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-wealth-in-a-depressed-economy">How to Build Wealth in a Depressed Economy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/etfs-offer-incredible-benefitswith-a-dark-side">ETFs Offer Incredible Benefits...with a Dark Side</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News bitcoin crypto-currency Fri, 23 May 2014 08:12:16 +0000 Ryan Lynch 1140202 at http://www.wisebread.com Miracle Device Coin Rolls All Your Credit Cards Into One http://www.wisebread.com/miracle-device-coin-rolls-all-your-credit-cards-into-one <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/miracle-device-coin-rolls-all-your-credit-cards-into-one" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/credit-card-177134984.jpg" alt="credit cards" title="credit cards" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Having your credit cards all suddenly disappear is something people usually fear. But now it's something you can eagerly look forward to, thanks to <a href="https://onlycoin.com/">Coin</a>, a new credit-card sized wonder-device that will effectively store all of your plastic in one place.</p> <p>The device has had early adopters salivating for about a year now, but it just <a href="http://techcrunch.com/2014/01/02/coin-video-demo/">debuted at tech festival Techcrunch Disrupt</a>, making its planned late summer ship date all the more real.</p> <p>So what <em>is</em> Coin, exactly? It's the size of a credit card, it looks like a credit card, and most importantly, it swipes like a credit card. But really, it's multiple credit cards stored on an electronic gadget that lets you toggle between each, eliminating the need to carry around a bulky wallet. Much of the beauty of the gadget is in its simplicity. Uploading cards, for example, is done with by simply swiping them through an iPhone attachment and then snapping a photo of each. Once uploaded, Coin lets you toggle among cards with the push of a button, allowing you, for instance, to <a href="http://www.wisebread.com/5-best-gas-rewards-credit-cards">pay for gas with the company card</a>, then buy groceries with your <a href="http://www.wisebread.com/5-best-cash-back-credit-cards">cash back card</a>, then pay for dinner with your <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards">travel rewards card</a>.</p> <p>As with any great concentration of power (in this case, purchasing power), there's potential danger. What if you leave Coin behind, losing not only one card, but, effectively, <i>all</i> your cards? Never fear: the device uses a Bluetooth signal that syncs with your phone, meaning if the two get separated (e.g., You leave the card with the check), you'll be immediately notified.</p> <p>While first shipments are still a couple months away, Coin is accepting pre-orders now. Order now, and it may be one of the last time you actually need to dig out of one of your credit cards.</p> <p><iframe width="560" height="315" src="//www.youtube.com/embed/w9Sx34swEG0" frameborder="0" allowfullscreen></iframe></p> <a href="http://www.wisebread.com/miracle-device-coin-rolls-all-your-credit-cards-into-one" class="sharethis-link" title="Miracle Device Coin Rolls All Your Credit Cards Into One" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joe-epstein">Joe Epstein</a> of <a href="http://www.wisebread.com/miracle-device-coin-rolls-all-your-credit-cards-into-one">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-pieces-of-credit-card-tech-that-will-blow-your-mind">6 Pieces of Credit Card Tech That Will Blow Your Mind</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-silly-internet-mistakes-you-need-to-stop-making-today">10 Silly Internet Mistakes You Need to Stop Making Today</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">I Don&#039;t Love Capital One - How to Get a Lower APR, or Possibly Not</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-gasoline-pump-y2k-problem">The Gasoline Pump &quot;Y2K&quot; Problem</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-will-the-new-credit-card-rules-affect-consumers">How will the new credit card rules affect consumers?</a></span> </div> </li> </ul> </div> </div> </div> </div> Credit Cards Financial News Technology credit card gadgets technology Thu, 15 May 2014 09:00:25 +0000 Joe Epstein 1138804 at http://www.wisebread.com New App Ondot Is a Remote Control for Your Credit Card http://www.wisebread.com/new-app-ondot-is-a-remote-control-for-your-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/new-app-ondot-is-a-remote-control-for-your-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/phone-148486921.jpg" alt="smartphone" title="smartphone" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>What's the good of ordering food via your smartphone's Grubhub app or ordering a car via its Uber app if you don't also have an app to make sure there's some money left on your credit card when it gets there? (See also: <a href="http://www.wisebread.com/3-smartphone-apps-that-manage-and-maximize-your-credit-card-rewards?ref=seealso">Apps to Manage Credit Card Rewards</a>)</p> <p>Well soon you will, thanks to <a href="http://www.ondotsystems.com">Ondot</a>, a San Jose-based company that just unveiled Card Control, a mobile command center for defeating fraud, all built into your phone.</p> <p>At the most basic level, the app serves as an extra line of protection against fraud, allowing the user to toggle the card's use on or off, or set the card to only function within certain parameters.</p> <p>For example, a location-based control means one can set their card to work only in a specific zip code, meaning it will automatically shut off if it gets nabbed and taken for a ride. Or, the app can sync a phone's GPS to the card, effectively disabling it if they're separated (e.g., the card is left behind).</p> <p>Other users might choose to toggle types of merchants the card will work with, disabling e-merchants until the user manually unlocks them before making a purchase, for instance. (See also: <a href="http://www.wisebread.com/keep-your-credit-card-safe-while-shopping-online?ref=seealso">Credit Card Safety When Shopping Online</a>)</p> <p>And here's where &mdash; even for <a href="http://www.wisebread.com/whats-your-credit-card-spending-style">those unconcerned with fraud</a> &mdash; the app gets really interesting. That same technology allows parents to limit or toggle types of spending on their kids' credit cards, meaning one might allow food purchases but bar clothing expenditures on any particular card. And the app would even allow parents to monitor their kids' card use in real time.</p> <p>While the company's been around since 2011 and already raised $18 million in funding, the app itself is just now rolling out, having already partnered with four major card processors working with 10,000 banks and credit unions across the country.</p> <p><img width="605" height="446" src="http://www.wisebread.com/files/fruganomics/u784/Ondot.jpg" alt="" /></p> <a href="http://www.wisebread.com/new-app-ondot-is-a-remote-control-for-your-credit-card" class="sharethis-link" title="New App Ondot Is a Remote Control for Your Credit Card" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/joe-epstein">Joe Epstein</a> of <a href="http://www.wisebread.com/new-app-ondot-is-a-remote-control-for-your-credit-card">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/great-sites-for-online-wedding-shopping">Great Sites for Online Wedding Shopping</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-favorite-mail-order-websites">10 Favorite Mail-Order Websites</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-shop-a-beginners-guide">How to Shop: A Beginner&#039;s Guide</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-why-buying-groceries-online-is-great">3 Reasons Why Buying Groceries Online Is Great</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/six-great-tech-tools-for-planning-your-own-death-0">Six Great Tech Tools for Planning Your Own Death</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News Technology credit card fraud online shopping smartphone apps Sat, 26 Apr 2014 04:14:40 +0000 Joe Epstein 1136959 at http://www.wisebread.com Save More by Avoiding Multiple Bank Accounts http://www.wisebread.com/save-more-by-avoiding-multiple-bank-accounts <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/save-more-by-avoiding-multiple-bank-accounts" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/piggy-bank-4562214-small.jpg" alt="piggy bank" title="piggy bank" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Want to save more? Keep it simple.</p> <p>Conventional wisdom holds that people should spread savings across different accounts, and the typical American has multiple checking and savings and other types of financial accounts. However, they're more likely to save more with just one savings account, according to a new study by a University of Kansas researcher. (See also: <a href="http://www.wisebread.com/zen-and-the-art-of-hiding-money" target="_blank">Zen and the Art of Hiding Money</a>)</p> <p>People save more if they have just one account compared to multiple checking and savings accounts, according to Kansas University assistant professor Promothesh Chatterjee.</p> <p>&quot;Nowadays, the average American has multiple liquid accounts, typically a combination of checking and savings accounts,&quot; he said in a <a href="http://www.news.ku.edu/2013/04/17/trying-save-more-consolidate-your-bank-accounts-researcher-says" target="_blank">press release</a>. &quot;But our research finds this is the wrong strategy to encourage saving. We find that individuals are more likely to save if they have only one primary account, rather than many accounts.&quot;</p> <h2>Banking Implications</h2> <p>His research has implications for accepted banking practices and national policies. Banks frequently offer several accounts to new clients, but the findings argue against that practice.</p> <p>Americans save next to nothing &mdash; the current national savings rate is estimated at 5%. And the inability to save cuts across income and educational levels.</p> <p>&quot;Given that context, this type of research is important to lots of people,&quot; Chatterjee said.</p> <p>Why does having several accounts encourage people to save less?</p> <blockquote><p>Utilizing work on motivated reasoning and fuzzy-trace theory, we suggest that multiple accounts engender fuzzy gist representations, making it easier for people to generate justifications to support their desired spending decisions. However, a single account reduces the latitude for distortion and hinders generation of justifications to support desirable spending decisions.</p> </blockquote> <h2>Fuzzy Savings</h2> <p>In other words, people with <a href="http://www.wisebread.com/financial-iq-test-how-healthy-are-your-bank-accounts" target="_blank">more accounts lack a clear idea</a> of how much they have saved and use that muddled picture to rationalize their spending decisions. We feel good about ourselves over the long-term when we save, but we feel good right away when we spend, which prompts us to find justifications to spend.</p> <p>Simply put, if you have different savings accounts, it's easy to convince yourself that you have a ton of savings. If you have it all in one place, you can plainly see what you have &mdash; or don't have.</p> <p>Those who are opposed to consolidating accounts, according to the research, can at least try using <a href="http://www.wisebread.com/beyond-budgeting-pocketsmith-helps-you-forecast" target="_blank">software programs that add up different accounts</a>, allowing users to see the total in one place.</p> <p>His research used four separate studies with a total of 566 participants who had the opportunity to earn, spend, and save money. The results were published in the May 2013 issue of the journal &quot;Organizational Behavior and Human Decision Processes.&quot;</p> <p>The students participating in the study earned money for doing tasks on a computer, and then had chances to buy items, such as university T-shirts, notebooks, and a computer mouse, or add money to their savings, according to a <a href="http://bucks.blogs.nytimes.com/2013/04/18/fewer-bank-accounts-may-result-in-more-savings/" target="_blank">New York Times story</a> on the research. Those who kept earnings in a single account saved more than those with multiple accounts. The issue was not their mathematical abilities, but rather their motivation, Chatterjee said.</p> <h2>Targeted Accounts for Saving?</h2> <p>Others disagree and argue that using <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system" target="_blank">targeted savings accounts</a> is the best way to accumulate savings.</p> <p>Different savings accounts &mdash; for example for emergencies, a new car, and a vacation &mdash; offer a motivational tool for saving for specific goals, writes one proponent of <a href="http://business.time.com/2011/08/23/use-targeted-saving-to-achieve-your-goals" target="_blank">targeted savings accounts</a>, J.D. Roth, founder of website Get Rich Slowly and author of &quot;Your Money: The Missing Manual.&quot;</p> <p>When savings are combined, it's easy to lose track of how much you've saved for each goal and use money for one goal to pay for another use, he says, adding that online savings accounts offer higher yields and let customers split their funds into subaccounts and even name them.</p> <p><em>Do you use multiple accounts to manage your savings or just one? What works best for you in terms of reaching your savings goals?</em></p> <a href="http://www.wisebread.com/save-more-by-avoiding-multiple-bank-accounts" class="sharethis-link" title="Save More by Avoiding Multiple Bank Accounts" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/save-more-by-avoiding-multiple-bank-accounts">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-quirky-ways-to-spend-less-and-kick-start-saving">4 Quirky Ways to Spend Less and Kick-Start Saving</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-iq-test-how-healthy-are-your-bank-accounts">Financial IQ Test: How Healthy Are Your Bank Accounts?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-annoying-bank-fees-and-how-to-avoid-them">12 Annoying Bank Fees and How to Avoid Them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/chexsystems-what-it-is-and-how-it-can-make-it-difficult-for-you-to-open-a-bank-account">ChexSystems: What It Is, and How It Can Make It Difficult for You to Open a Bank Account</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-types-of-savings-accounts-which-is-right-for-you">The Types of Savings Accounts: Which Is Right For You?</a></span> </div> </li> </ul> </div> </div> </div> </div> Banking Budgeting Financial News bank accounts saving strategies savings accounts Mon, 17 Jun 2013 09:48:33 +0000 Michael Kling 977910 at http://www.wisebread.com What I Miss About the Recession http://www.wisebread.com/what-i-miss-about-the-recession <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-i-miss-about-the-recession" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/3348350633_05b146223b_z.jpg" alt="recession bargain" title="recession bargain" class="imagecache imagecache-250w" width="250" height="187" /></a> </div> </div> </div> <p>The recent &quot;Great Recession&quot; was officially deemed to be over in 2009, but it is only recently that the economic recovery seems to have really picked up speed. While it is nice to see the stock market go up and the unemployment rate go down, I do miss a few things about the recessionary years. I'm not actually looking forward to the next recession, of course, but when it comes (and it will, some time), here's what I'll be looking forward to more of. (See also:&nbsp;<a href="http://www.wisebread.com/preparing-for-a-recession">Preparing for a Recession</a>)</p> <h2>Less Traffic</h2> <p>Lately I have definitely felt that traffic has increased during commute hours. It is great that more people are getting jobs, but I do miss the shorter commute times and less congested roads. Apparently the increase in traffic is happening all around the country, and the National Safety Council reported the <a target="_blank" href="http://www.nsc.org/Pages/National-Safety-Council-Estimates-First-National-Increase-in-Traffic-Deaths-Since-2005-.aspx">first increase in traffic related fatalities in years. </a></p> <h2>Shorter Lines</h2> <p>During the recession we rarely had to wait for a spot at a restaurant, but now that is very common. Restaurants that did not need a reservation during the recession are bustling once again. It is great to see establishments have more business, but it was nice to eat in sparsely populated dining rooms where it was easier to hear your friends across the table. There were also shorter lines at many malls and parks.</p> <h2>Bargains</h2> <p>It was much easier to find a bargain during the recession. You could negotiate down the price of almost everything, <a target="_blank" href="http://www.wisebread.com/should-you-try-to-reduce-your-rent">including rent</a>. Hotels and travel were also cheap, and there were more restaurant coupons than I could use.</p> <p>Lately I have definitely seen fewer sales and coupons and an increase in prices on most goods and services. Large ticket items such as furniture and real estate were being sold at below replacement cost during the last recession, but now it is much more difficult to find a bargain that good.</p> <h2>Frugality and Saving</h2> <p>In the last few years everyone talked about saving instead of buying that next big thing. The frugal people were suddenly not so crazy!</p> <p>Now it seems that the tide is turning, and saving money is beginning to be uncool again. The <a href="http://www.wisebread.com/how-to-earn-a-good-interest-rate-in-a-low-rate-environment">zero interest environment</a> does not help the savers' argument at all, and there seems to be less urgency for everyone to save as a whole. The funny thing is that saving during the lean years when you have less income is much harder than saving during the flush years. I do miss that more people cared about saving money during the recession, and I hope they realize that they should try to save more now to prepare for the next recession.</p> <p>There are many things about the last few years that were not very nice, but I definitely saw the brighter side of the worst economy since World War II. I hope some of you were able to get some great bargains that you could use for years to come, and that you are keeping up those <a href="http://www.wisebread.com/your-saving-habits-make-you-a-revolutionary">good frugal habits</a> you have learned. In the next recession those who have cash will have many more choices than those who don't.</p> <p><em>What do you miss about the recession?</em></p> <a href="http://www.wisebread.com/what-i-miss-about-the-recession" class="sharethis-link" title="What I Miss About the Recession" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/what-i-miss-about-the-recession">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-new-normal-economy">The new normal economy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peak-debt">Peak Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-george-w-bush-write-for-wisebread">Should George W. Bush write for Wisebread?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/preparing-for-a-recession">Preparing for a Recession</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News bargains Economy habits recession Fri, 29 Mar 2013 09:48:30 +0000 Xin Lu 971476 at http://www.wisebread.com Boost Your Retirement Savings: Avoid 401(k) Fees http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/boost-your-retirement-savings-avoid-401k-fees" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/guy_with_paperwork2.jpg" alt="Guy with paperwork" title="Guy with paperwork" class="imagecache imagecache-250w" width="250" height="157" /></a> </div> </div> </div> <p>You might not have noticed if your 401(k) plan has been charging exorbitant fees for accounting, record keeping, legal work, management, or for any number of dubious reasons. In fact, 7 out of 10 participants don't know they pay fees to their 401(k) plan provider, according to an <a target="_blank" href="http://www.aarp.org/work/retirement-planning/info-02-2011/401k-fees-awareness-11.html">AARP survey</a>. When told of the fees, 6 in 10 didn't know how much they pay, and almost a third said they do not feel knowledgeable about the impact fees have on their retirement savings. (See also: <a href="http://www.wisebread.com/how-to-make-the-most-of-your-401K">How to Make the Most of Your 401(k)</a>)</p> <p>A single fee may not be much, but they certainly add up over time and cut into your hard-earned retirement savings. Fees for a median-income two-earner family can reach almost $155,000 and consume nearly a third of the workers' investment returns over a lifetime, warns Demos, a progressive think tank. <a target="_blank" href="http://www.demos.org/publication/retirement-savings-drain-hidden-excessive-costs-401ks">According to its calculations</a>, a family with each partner earning the median income for their gender will pay an average of $154,794 in 401(k) fees over its lifetime.</p> <p>Plan administrators have gotten away with excessive fees because many people don't know about them. Even if you thought to ask, you might have found the information difficult to understand.</p> <p>That is hopefully changing with new rules from the <a target="_blank" href="http://www.dol.gov/ebsa/publications/understandingretirementfees.html#.UMfOtIPBGSo">Department of Labor</a>. Regulations rolled out this year require 401(k) administrators to clearly spell out any fees and expenses for administrative services, such as legal, accounting, or record keeping.</p> <p>Plan administrators must provide total annual operating expenses as both a percentage of assets and a dollar amount for each $1,000 invested. They also have to provide historical investment returns over the past 1, 5, and 10 years along with returns of similar market indexes for comparisons.</p> <p>Regardless of the new reporting requirements, you can avoid paying high account fees by following a few simple steps.</p> <h2>Go for Low-Fee Options</h2> <p>Unless there's a good reason to pay a higher fee, pick investment options with lower fees. Aggressive stock funds may do well one year but rarely consistently do better than the overall stock market. Plus, their high fees eat into returns.</p> <h2>Use Index Funds</h2> <p>Index funds, which are based on market indexes, have substantially lower management fees than actively managed funds that have administrators picking their stocks or bonds &mdash; usually less than 0.5% compared to 1% or more. And more expensive funds don't return more money than index funds over the long run.</p> <h2>Consider IRAs</h2> <p><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">IRAs offer greater investment choices</a> and often lower costs, although you probably should stick with a 401(k) if your employer matches contributions.</p> <h2>Ask for Options</h2> <p>Ask your human resources department or boss for more low-fee options like index funds.</p> <h2>Beware Special Fees</h2> <p>Watch out for fees for any special features, trading costs, and fees associated with insurance products like variable annuities.</p> <h2>Don't Borrow From Your 401(k)</h2> <p>This may entail a service fee. <a href="http://www.wisebread.com/tax-penalties-for-early-retirement-withdrawals">Borrowing from your retirement fund</a> is generally bad idea anyway and should only be a last resort.</p> <h2>Use Online Tools</h2> <p>Online tools, such as <a target="_blank" href="http://www.aarp.org/money/investing/compare_investment_fees_calculator.html">AARP's 401(k) fee calculator</a>, can help you compare costs to other 401(k) providers. If costs seem exorbitant, point that out to your HR department or consider an IRA.</p> <p>Unfortunately, new rules don't require plan providers to show how costs impact your savings over the years or require them to compare their fees to other plan administrators. The hope is that greater knowledge and increased transparency will increase competition and drive down costs.</p> <a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees" class="sharethis-link" title="Boost Your Retirement Savings: Avoid 401(k) Fees" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement">6 Ways to Avoid Running Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-not-just-for-people">Retirement: Not Just for People?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-essential-truths-for-a-successful-retirement">7 Essential Truths for a Successful Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News Investment Retirement 401k account fees retirement planning Thu, 20 Dec 2012 10:48:37 +0000 Michael Kling 959728 at http://www.wisebread.com Downside of the Rolling Jubilee http://www.wisebread.com/downside-of-the-rolling-jubilee <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/downside-of-the-rolling-jubilee" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/5040430171_2ab0f60994_z.jpg" alt="hands" title="hands" class="imagecache imagecache-250w" width="250" height="150" /></a> </div> </div> </div> <p>As a media-savvy ploy to shift public opinion on the debt problem, the Rolling Jubilee may be a brilliant PR move. It's probably not much real help for debtors. (See also: <a href="http://www.wisebread.com/how-debt-fools-people">How Debt Fools People</a>)</p> <p>Are you familiar with the <a href="http://rollingjubilee.org/">Rolling Jubilee</a>? What they do is use donations to buy up distressed debt for pennies on the dollar, then forgive the debt and send the debtor a letter telling him how to get started cleaning up his credit rating.</p> <p>As public relations, this is brilliant. It highlights the way lenders and collection agencies swap these debts around for pennies on the dollar &mdash; but won't let the <em>debtor</em> pay it off for pennies on the dollar. It also engages the public in a discussion on the <a href="http://www.wisebread.com/wage-slave-debt-slave">unfairness of our current system of debt</a> and the crushing burden weighing down the poor, the sick, the young, the troubled, and the merely unlucky.</p> <p>As a way of actually relieving debt for actual people, it doesn't do much.</p> <h2>Too Little Help for Too Few People</h2> <p>Any debt that can be bought up for pennies on the dollar is debt that was already long ago written off as uncollectable.</p> <p>That doesn't mean it's not a problem for the debtor. The debt's presence on their credit report probably makes it impossible for the debtor to ever get their finances cleaned up. It doesn't just make it impossible to borrow money; it makes it tougher to find a place to live, find a job, get insurance, even open a bank account. (If that last applies to you, check out my posts <a href="http://www.wisebread.com/new-tools-for-the-unbanked">New Tools for the Unbanked</a> and <a href="http://www.wisebread.com/making-direct-deposit-safe-for-the-garnished">Making Direct Deposit Safe for the Garnished</a>.)</p> <p>It does mean it probably isn't the debtor's biggest problem. Forgiving $1,100 originally charged on some credit card is great, but it does nothing to keep the electricity turned on or stave off foreclosure or cover the health insurance bill.</p> <p>So from the debtor's perspective, it's more a tease than actual help. &quot;Oh joy! Kind strangers have swooped in and solved my eleventh most pressing problem!&quot;</p> <p>It also helps too few people for the debt reduction to have any societal effect. A really sweeping reduction in the amount of debt that all heavily indebted people owed would change the whole economy, unleashing all sorts of activity from people previously trapped by debt. (Unleashing spending, of course, but not just that. It would also free people to be more entrepreneurial, if they didn't have the relentless burden of monthly payments.)</p> <h2>Pernicious Effect on Debt Value</h2> <p>This, I think, is where the Rolling Jubilee does real harm.</p> <p>A lot of the debt that has gone into collections isn't even owed. This can happen a lot of different ways:</p> <ul> <li>A legitimate debt was paid in full, but is still on the books due to an error by the lender.<br /> &nbsp;</li> <li>Debt that was illegitimate from the start, such as money borrowed by an identity thief.<br /> &nbsp;</li> <li>The lender has gotten confused about who owes the money and is dunning the wrong person.<br /> &nbsp;</li> <li>The debt was discharged in bankruptcy.<br /> &nbsp;</li> <li>The debt is disputed, such as when a shoddy product is returned, but the seller refused to credit the account.<br /> &nbsp;</li> <li>The underlying debt is a trivial amount &mdash; a $10 late fee &mdash; but has blown up to a large sum due to additional fees and penalty interest rates.</li> </ul> <p>Most of those cases could be sorted out if the borrower (or supposed borrower) knew their rights. Most could be ended with a simple letter along the lines of, &quot;I don't owe that money. Either send me proof that I'm wrong or quit bugging me.&quot; Sadly, too many borrowers don't know their rights with regard to disputed debts.</p> <p>The problem is, even bogus and disputed debts like these have some value on the secondary market. Debt collectors on the sleazier end of the business will buy debts for, let's say, 5 cents on the dollar. Then they badger the supposed borrowers, trying to get blood out of a stone. If the collection agency can collect 10 cents on the dollar, they're making real money.</p> <p>Once they've gotten what money they can, they'll sell everything on to some even sleazier agency.</p> <p>The danger I see is this &mdash; if the Rolling Jubilee will pay cash for these debts &mdash; especially if they're buying the cheapest ones they can find &mdash; they're rewarding the very people who keep selling on the illegitimate debts. That makes it worth keeping the fake debt &mdash; debt nobody actually owes &mdash; on the books.</p> <p>Anything that makes it more profitable to be sloppy about keeping track of who does and doesn't owe you money is a bad thing.</p> <h2>Still Probably a Positive Force</h2> <p>Despite the fact that the movement will do little good for real debtors, and will do some real harm (by inflating the value of fake debts), I think on balance the Rolling Jubilee is a good thing.</p> <p>I don't expect it will get big enough to be a real factor in the debt market, so the real harm is as limited as the real good it might do. But just by existing, it is advancing the discussion on <a href="http://www.wisebread.com/peak-debt">how our society handles debt</a>. That's a big win.</p> <a href="http://www.wisebread.com/downside-of-the-rolling-jubilee" class="sharethis-link" title="Downside of the Rolling Jubilee" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/downside-of-the-rolling-jubilee">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-of-the-phrase-we-can-cut-your-debt-in-half">Beware of the Phrase &quot;We Can Cut Your Debt In Half!&quot;</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-can-you-do-with-13-extra-a-week-0">What can you do with $13 extra a week?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/solving-a-debt-dilemma-with-debt-settlement">Solving a Debt Dilemma with Debt Settlement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-one-day-do-it-yourself-bankruptcy">How to Do a One-Day, Do-It-Yourself Bankruptcy</a></span> </div> </li> </ul> </div> </div> </div> </div> Consumer Affairs Debt Management Financial News forgiven debt occupy wall street Wed, 28 Nov 2012 11:24:44 +0000 Philip Brewer 958810 at http://www.wisebread.com The Housing Market Is Finally Rebounding http://www.wisebread.com/the-housing-market-is-finally-rebounding <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-housing-market-is-finally-rebounding" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/4629169207_05751fefb6_z.jpg" alt="sale sign" title="sale sign" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>The housing market is rebounding. Really.</p> <p>After many premature predictions and optimistic announcements, the housing market has indeed turned a corner. Home prices and sales are up. Foreclosures and mortgage delinquencies are down.</p> <p>Average home prices in the top 20 metro areas were up 1.6% in July from a year ago, according to the S&amp;P/Case Shiller Home Price Indices. All 20 cities in the index reported rising home prices for the third month in a row.</p> <p>&quot;All in all, we are more optimistic about housing. Upbeat trends continue,&quot; said David M. Blitzer at S&amp;P Dow Jones Indices.</p> <p>The median existing-home price, including all housing types, was $183,900 in September, up 11.3% from a year ago, according to the National Association of Realtors. The year-over-year monthly home prices have increased for seven months in a row. The last time that happened was from November 2005 to May 2006.</p> <p>&quot;Despite occasional month-to-month setbacks, we're experiencing a genuine recovery,&quot; said Lawrence Yun, NAR chief economist. &quot;More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest.&quot; (See also: <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really&nbsp;Costs to&nbsp;Own a Home</a>)</p> <h2>The Buyer's Market Is Over</h2> <p>What's more, the buyer's market may be coming to an end as sentiment begins to favor sellers. A survey by RedFin, a technology-based real estate brokerage firm, showed that homebuyers believe the market may be shifting against them. Out of 982 homebuyers polled this summer, 46% said they believe that now is a good time to buy. That was down from 56% in the first quarter and 48% in the second quarter. Thirty-two percent think now is a good time to sell, up from 13% in the first quarter and 28% in the second quarter.</p> <p>Importantly, many homebuyers, 61%, believe home prices will increase, up from 32% in the first quarter. More buyers are coming across competition or even bidding wars for a limited number of homes being sold &mdash; 71% of respondents reported encountering competition on at least one offer.</p> <p>Homes are also selling faster. The median time on the market in September dropped 30.7% from 101 days in September 2011, another indication that housing has strengthened.</p> <h2>Too Many Buyers for Homes</h2> <p>The problem for home buyers is the shortage of homes being sold. In parts of the West, the shortage is especially acute, Yun said. The number of existing homes listed for sale fell 3.3% to 2.32 million at the end of September. That's down 20% from a year ago.</p> <p>Fewer homes being sold means rising prices, a trend that will accelerate unless home builders ramp up construction fast, Yun said.</p> <p>Why the shortage? Homeowners who bought their homes before the housing bubble bust are unwilling to sell now and take a loss. Homebuilders all but stopped home construction during the recession, and a wave of foreclosures hitting the market has failed to materialize.</p> <h2>Home Buying Is for the Fast and Ready</h2> <p>Real estate agents advise home buyers &mdash; don't fret about home price trends. If you love a house and are comfortable with the mortgage payments, make an offer.</p> <p>If you want to buy a home, don't keep waiting in an attempt to &quot;<a href="http://www.wisebread.com/once-again-safe-as-houses">wait for the bottom</a>.&quot; By the time you've concluded home prices have hit bottom, they'll probably already be rising. And even if prices do fall in your area, interest rates may rise. That will make mortgages more expensive, defeating the purpose of seeking affordable housing.</p> <p>Don't be too picky. You might not find your dream house, especially with fewer homes on the market than potential home buyers. Don't worry about appliances, colors of the walls, or weeds in the yard. You can always replace a refrigerator and paint walls latter.</p> <p>Be ready and fast. Obtain <a href="http://www.wisebread.com/buying-first-home/home-loans">mortgage preapproval</a>. Submit your financial documentation to a lender to get preapproval for a maximum home loan amount. Get to know the neighborhood where you're house hunting. Learn about multiple-offer situations and plan out what you'll do.&nbsp;</p> <h2>Should You Buy a House Now?</h2> <p>So should you should you rush to by a home before home prices increase even more? It depends.</p> <p>Because real estate is local, prices in your area might not follow national trends or the trend in a nearby metro area. Examine local home values when you're home shopping, not national or regional price indexes.</p> <p>Regardless of the home price outlook, before you jump into home buying, your personal and career situation should be settled enough for you to stay put for at least a few years. Buying a home is not like speculating in gold or stocks. You can sell a commodity like a stock fairly easily, but when you buy real estate, you pay an assortment of mortgage closing costs and fees. When you sell, you pay the real estate agent a commission. For that reason, you should plan to keep the property for at least several years to make the investment worthwhile.</p> <p>Your financial house, so to speak, should be in order, your credit good enough to obtain a favorable home loan rate, and a savings large enough for a down payment &mdash; ideally at least 10% but ideally 20% to avoid private mortgage insurance, which insures the lender and brings no benefit to you.</p> <p>You should be ready to pay for maintenance and repairs or to <a href="http://www.wisebread.com/5-household-fixes-you-should-stop-paying-others-for">fix things yourself</a>. Unlike a renter who calls the landlord when a faucet leaks, you'll be responsible for mowing the lawn and fixing anything that breaks.</p> <a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding" class="sharethis-link" title="The Housing Market Is Finally Rebounding" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">How to Choose a Real Estate Agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/renting-is-cheaper">Renting is cheaper</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy">How to Evaluate a Neighborhood Before You Buy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/will-house-prices-keep-dropping">Will house prices keep dropping?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-conforming-loan-limits-be-increased-0">Should Conforming Loan Limits Be Increased?</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News Real Estate and Housing buying a house foreclosures housing market Fri, 16 Nov 2012 10:36:50 +0000 Michael Kling 955599 at http://www.wisebread.com Retirement: Not Just for People? http://www.wisebread.com/retirement-not-just-for-people <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/retirement-not-just-for-people" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/1517561890_ceeea08098_z_0.jpg" alt="man by beach" title="man by beach" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>This has always been true &mdash; almost all the economic value of a typical household is the future value of its members' labor.</p> <p>With a little foresight, this will change over time. As your career progresses, you build up savings and investments, with the goal of replacing your income from labor with income from financial assets, preparing for some future time when you can no longer work. You accumulate other assets as well. Household goods, once purchased, continue to provide value for years or decades. If you pay off your mortgage (rather than doing a series of cash-out refinances), you eventually own a house you can live in. (See also:&nbsp;<a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really&nbsp;Costs to Own a Home</a>)</p> <p>A lot of what I've written here at Wise Bread has been to advocate for this shift. To advocate for making it early. To advocate for making it consciously.</p> <p>One thing that I hadn't really thought about until recently, is that corporations have been making much the same shift.</p> <p>Until around 1980, the economic value of a corporation was almost entirely the value of its productive capacity. Over the next decade or two, that changed. Instead of investing in plant and equipment, corporations found it more profitable to set up financing arms, to lend their customers the money to buy their products. During the 1990s and early 2000s, companies like General Electric and General Motors found that their money-lending businesses made much more money than their manufacturing businesses.</p> <p>This had a lot of negative side effects. It led to the elimination of good manufacturing jobs, only partially offset by the creation of finance jobs. This shift, as much as off-shoring, was what eliminated six million manufacturing jobs over the past 20 years.</p> <p>It also made corporations much less answerable to their customers. Before, companies either produced what people wanted to buy, or else their profits suffered. After this shift, it scarcely mattered what corporations produced, because so much of their income was <a href="http://www.wisebread.com/simple-living-through-capital">investment income</a>.</p> <p>Basically, the corporations could retire.</p> <p>This shift only benefits the management &mdash; they can now report reliable profits without having to actually do any work.</p> <p>It might be nice if the harmful effects on workers would be enough to promote change, but I don't think that's going to happen. Fortunately, this whole thing is also a negative for shareholders &mdash; the corporate structure doesn't provide any value-add for the shareholders. (Really, it's of negative value &mdash; another layer of expense and another layer of taxation.) The shareholders would be much better off simply getting their money back and investing it themselves.</p> <p>So, although the negative side effects are large, I don't think they're permanent. I foresee an end to the days of retired corporations. If you own stock in such a corporation, you might consider whether your money would be better off in a <a href="http://www.wisebread.com/investing-with-your-values">company that actually does or makes something</a>.</p> <a href="http://www.wisebread.com/retirement-not-just-for-people" class="sharethis-link" title="Retirement: Not Just for People?" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/retirement-not-just-for-people">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees">Boost Your Retirement Savings: Avoid 401(k) Fees</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-running-out-of-money-in-retirement">6 Ways to Avoid Running Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-you-must-open-a-roth-ira-before-april-15">4 Reasons Why You Must Open a Roth IRA Before April 15</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-know-what-annuities-are-you-might-be-missing-out">Don&#039;t Know What Annuities Are? You Might Be Missing Out</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News Investment Retirement corporations investment income Manufacturing Tue, 18 Sep 2012 10:00:43 +0000 Philip Brewer 954552 at http://www.wisebread.com What Is the Fiscal Cliff? http://www.wisebread.com/what-is-the-fiscal-cliff <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-is-the-fiscal-cliff" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/1370523_50646878%20%281%29.jpg" alt="Cliff" title="Cliff" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>If you&rsquo;ve been surfing the web lately, you&rsquo;ve probably seen the phrase &ldquo;fiscal cliff&rdquo; thrown around on finance, business, and political sites.</p> <p>The fiscal cliff refers to a series of fiscal policy changes set to take place at the end of 2012. While each are worrisome alone, the combination of fiscal and political changes has many concerned that the effects could snowball, resulting in a severe slowdown of the economic recovery. The November Presidential Election, which further complicates matters. Given the seeming inability of both parties to work together, it seems unlikely that either Democrats or Republicans would be willing to strike a deal on fiscal issues before the 2012 election plays out.</p> <p>Still, there&rsquo;s no reason to consider jumping off that fiscal cliff just yet. It&rsquo;s likely that politicians will strike some sort of compromise at the eleventh hour, and that the Fed may rework the <a href="http://www.investopedia.com/terms/o/operation-twist.asp">Operation Twist program</a> given the economy&rsquo;s uncertainty. But the combination of increased taxes and budget cuts could prove dire for the U.S. economy. While spending cuts would lead to a lower deficit, they could also cause the GDP to contract up to an estimated 1.3% in the first quarter of 2013, according to the Congressional Budget Office. (See also: <a href="http://www.wisebread.com/tax-brackets-explained">Tax Brackets Explained</a>)</p> <p>Here&rsquo;s an overview (albeit a very condensed version) of what comprises the fiscal cliff.</p> <h2>The Monetary Cliff</h2> <p>The &ldquo;monetary cliff&rdquo; typically refers to the end of the Federal Reserve&rsquo;s &ldquo;Operation Twist&rdquo; program, set to complete at the end of 2012. It&rsquo;s far more complicated than this, but the program essentially consists of the Federal Reserve buying treasuries from 6 to 30 years in duration to keep interest rates low. The concern is that if Operation Twist does in fact end in December of 2012, interest rates could rise, further crippling the economy.</p> <h2>The &quot;Sequester&quot; Backlash</h2> <p>Remember how last year the Federal budget super committee was unable to reach a deal on spending? Well, many of those postponed budget decisions could go into effect at the beginning of 2013.</p> <p>The automatic spending cuts set to kick in on January 2, 2013, would cut 1.2 trillion dollars total in spending. The majority of the cuts are split between defense and domestic spending. In addition, the Federal government will reach the &ldquo;debt ceiling&rdquo; at the end of 2012.</p> <h2>Expiring Tax Breaks and More</h2> <p>Several tax breaks and other benefits are set to expire.</p> <p><strong>The Bush Tax Cuts</strong></p> <p>The expiration of the Bush Tax Cuts could potentially affect taxpayers across the board. This issue is sure to result in some form of gridlock; Republicans are in favor of extending all the tax cuts, while Democrats only want to extend the cuts for those making under $250,000 a year.</p> <p><strong>Emergency Unemployment Benefits End</strong></p> <p>This one is pretty self-explanatory. An end for benefits could result in the <a href="http://www.wisebread.com/tips-for-thriving-in-long-term-unemployment">loss of unemployment income</a> for millions of Americans, many of whom rely on it for bills and living expenses.</p> <p><strong>Payroll Holiday Tax Ends</strong></p> <p>The expiration could result in up to a 2% tax increase for workers.</p> <p><strong>Measures to Protect the Middle Class From AMT (Alternative Minimum Tax)</strong></p> <p>When these expire, middle class families will see a hike in their federal taxes.</p> <p>Things get a lot more complex, but that's the general idea behind the fiscal cliff. Is this another example of fear mongering by the media, or a legitimate economic crisis waiting to happen?</p> <a href="http://www.wisebread.com/what-is-the-fiscal-cliff" class="sharethis-link" title="What Is the Fiscal Cliff?" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/erin-c-oneil">Erin C. O&#039;Neil</a> of <a href="http://www.wisebread.com/what-is-the-fiscal-cliff">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-life-inc">Book review: Life Inc.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy">Do These 8 Things to Profit From the Improving Economy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-still-pay-attention-to-bitcoin">Why You Should Still Pay Attention to Bitcoin</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees">Boost Your Retirement Savings: Avoid 401(k) Fees</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-weird-money-laws-you-may-have-broken">7 Weird Money Laws You May Have Broken</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News fiscal cliff inflation rate Tax Break Fri, 06 Jul 2012 10:24:08 +0000 Erin C. O'Neil 938563 at http://www.wisebread.com 6 Ways to Vet an IPO Before You Buy http://www.wisebread.com/6-ways-to-vet-an-ipo-before-you-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-vet-an-ipo-before-you-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/2974906840_c667250442_z.jpg" alt="guys using laptops" title="guys using laptops" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>In the aftermath of the <a href="http://www.wisebread.com/10-ways-to-make-facebook-productive">Facebook</a> initial public offering (IPO), the web has experienced a deluge of answers to the question &ldquo;What went wrong?&rdquo; What happens when one of the most hyped tech IPOs in recent history doesn&rsquo;t rise to meet investor expectations?</p> <p>For months I&rsquo;ve been advising family and friends against buying Facebook. The reasons were fairly simple. I felt the entire IPO was a matter of style over substance, with little data to back up long-term revenue growth and earnings potential. It was also entirely possible the value of Facebook had peaked, and the IPO was a way for Facebook executives to reap the rewards of the company&rsquo;s riches before an earnings decline. I felt Morgan Stanley, the firm underwriting the IPO, didn&rsquo;t understand how Facebook worked and certainly didn&rsquo;t understand the company. (In fact, rumor has it that over a year ago Morgan Stanley executives had to hire Zuckerberg to give a private tutoring session on how to navigate Facebook.) Hundreds of analysts more experienced and smarter than I am had a different perspective. Advice from media outlets came in droves, promising us the &quot;biggest IPO ever.&quot; Amidst all the frenzy, it became hard to distinguish the public image of Facebook from the public offering being presented.</p> <p>Perhaps the sagest advice came from PIMCO&rsquo;s CEO and co-CIO <a href="http://www.huffingtonpost.com/mohamed-a-elerian/facebook-stock_b_1533505.html">Mohamed A. El-Erian on the Huffington Post</a>, who remarked, &ldquo;&hellip;the manner that our brains have evolved and work may not always result in the best investment decisions.&rdquo;</p> <p>Instead of asking &ldquo;What went wrong?&rdquo; a better question for investors to ask might be &ldquo;How can we prevent this from happening again?&rdquo; Here are five ways to vet an IPO before you buy. (See also: <a href="http://www.wisebread.com/5-killer-free-investment-tools">5 Killer Free Investment Tools</a>)</p> <h3>1. Check the&nbsp;SEC S-1 Form</h3> <p>All companies are required to file what is called a Form S-1 with the Securities and Exchange Commission (SEC) before an IPO goes into effect. Facebook&rsquo;s can be found <a href="http://sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm" target="_blank">on the SEC.gov website</a>.</p> <p>The S-1 will contain the meat of the information on a company. It&rsquo;s not exactly light reading, but it will have important data that&rsquo;s well worth a look. Not only does an S-1 contain information on the offering price of the company and estimated par value of the stock, but facts and figures on a company&rsquo;s business plan, long-term growth objectives, and estimated budget. There&rsquo;s a wealth of information to be had on an S-1 form, and it should be considered a &ldquo;must read&rdquo; before any responsible investor even considers purchasing an IPO.</p> <h3>2. Read the Corporate Earnings Report</h3> <p>Companies typically have a portion of their website for &quot;Investor Relations.&quot; Browse carefully, and you should be able to find detailed financial information, often called Quarterly Reports or Annual Reports. Financial statements can provide detailed information on current cash flow and revenue, but more importantly for IPOs, projected cash flow and revenue. Facebook's Investor Relations area can be found on their <a href="http://investor.fb.com/">investor subsite</a>.</p> <h3>3. Consider the Underwriter</h3> <p>The firm underwriting the IPO serves several purposes. It prepares a valuation report of the company to be offered and helps to correctly determine the share price. This is usually a big investment firm. In Facebook's case, Morgan Stanley was the underwriter.</p> <p>When considering an IPO, scan the S-1 for mention of the underwriter and ask yourself a few questions. Is it a reputable firm? Do they have a history of accurately pricing IPOs? Do they stand to profit from the success or failure of an IPO?</p> <h3>4. Get Second Opinions</h3> <p>It's human nature to want to be told we're right. But when it comes to investments, try to get a second opinion and listen to people who disagree with you, just to consider an opposing scenario. Listening to other points of view might spark new questions you hadn't thought about, or might confirm your previous opinion. Either way, gather information from a variety of sources to use as informational tools in decision making.</p> <h3>5. Do a Risk-Benefit Analysis (for Yourself)</h3> <p>Ultimately, buying an initial public offering is always risky. Even the most seemingly stable companies can experience an unexpected setback or glitch that lowers their value after investors have bought into an IPO. A risk-benefit analysis involves weighing the risks and benefits of an investment and determining what is right for your individual situation. Remember that there's no market history on share prices for the company you're about to buy into, no way to glean historical data. The fact is that while most people focus on the &quot;get rich quick&quot; aspects of an IPO, it's just as likely that they will lose money. Be realistic about how much money you are willing to invest, and risk, on an IPO purchase. Will you experience buyer's remorse? Can you stand to <a href="http://www.wisebread.com/the-worst-investments-you-can-make">lose part of your investment</a>? In other words, don't bet the farm. It's common sense, but you'd be surprised at how many people forget about risk when they think a big payoff might be in the near future.</p> <a href="http://www.wisebread.com/6-ways-to-vet-an-ipo-before-you-buy" class="sharethis-link" title="6 Ways to Vet an IPO Before You Buy" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/erin-c-oneil">Erin C. O&#039;Neil</a> of <a href="http://www.wisebread.com/6-ways-to-vet-an-ipo-before-you-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/etfs-offer-incredible-benefitswith-a-dark-side">ETFs Offer Incredible Benefits...with a Dark Side</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-wealth-in-a-depressed-economy">How to Build Wealth in a Depressed Economy</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/boost-your-retirement-savings-avoid-401k-fees">Boost Your Retirement Savings: Avoid 401(k) Fees</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/portfolio-ailing-take-a-peek-at-asian-markets">Portfolio Ailing? Take a Peek at Asian Markets.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-invest-in-goldman-sachs-gs">Should You Invest in Goldman Sachs (GS)?</a></span> </div> </li> </ul> </div> </div> </div> </div> Financial News Investment Facebook initial public offering investment research Mon, 28 May 2012 10:36:09 +0000 Erin C. O'Neil 930828 at http://www.wisebread.com How Natural Disasters Can Change Pricing Worldwide http://www.wisebread.com/how-natural-disasters-can-change-pricing-worldwide <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-natural-disasters-can-change-pricing-worldwide" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://www.wisebread.com/files/fruganomics/imagecache/250w/blog-images/post-tsunami.jpg" alt="Recovery workers after a tsumani" title="Recovery workers after a tsumani" class="imagecache imagecache-250w" width="250" height="134" /></a> </div> </div> </div> <p>Millions of natural disasters occur around the world each year, from volcanic eruptions to wildfires to tsunami. As implied by the term &ldquo;disaster,&rdquo; these events can have devastating effects on human life, local economies, and the environment itself. Historically, natural disasters have caused a lot of damage to pricing schemes, as we can see from the following. (See also: <a href="http://www.wisebread.com/party-like-its-1999-the-psychology-of-pricing">The Psychology of Pricing</a>)</p> <h2>Earthquakes and Tsunami</h2> <p>With the United States&rsquo; Geological Survey&rsquo;s most recent <a href="http://earthquake.usgs.gov/earthquakes/eqarchives/year/eqstats.php">report on earthquakes</a> stating that its National Earthquake Information Centers are detecting up to fifty earthquakes per day (approximately 20,000 per year) and millions more are suspected to occur without detection, it&rsquo;s not surprising to see how earthquakes create not only tremors in the ground, but also in pricing for various goods in the market.</p> <p>Case in point &mdash; the devastating 9.0 earthquake off the coast of Japan that occurred on March 11, 2011. As one of the biggest exporters of technological products in the world, companies based in Japan faced a harrowing situation with the subsequent blackouts and parts shortages correlated to the earthquake and tsunami that struck the region. <a href="http://techland.time.com/2011/03/15/japan-earthquake-tech-supply-shortages/">TIME Magazine</a> reported that items such as televisions, PCs, and phones were (and still are) likely to see a rise in prices following the catastrophe. With factories shut down or wiped out altogether, the streamlined creation process for these technologies experienced a severe disruption in wake of these events, and we can see from historical evidence that this isn&rsquo;t the last time an earthquake will lead to a spike in prices due to industrial interruptions.</p> <h2>Global Warming</h2> <p>We&rsquo;ve been hearing about this one for years. From Al Gore&rsquo;s <em>An Inconvenient Truth</em> to the Kyoto Protocol (from which Canada recently withdrew and the United States has yet to ratify), global warming seems to be a major threat posed to our world today. While there are mixed views on the causes and even the very existence of this climate change, one thing is for sure &mdash; the regulations placed on corporations could potentially send prices soaring. This isn&rsquo;t to say these policies are not beneficial &mdash; the debate over whether we should protect the environment or the economy first and foremost will never cease &mdash; but when the operating costs for these companies rise as a result, they are more inclined to pass these costs along to consumers.</p> <p>As a 2009 Forbes article on the <a href="http://www.forbes.com/2009/06/08/waxman-markey-bill-carbon-emission-opinions-contributors-cap-and-trade.html">Cap and Trade Bill</a> stated, politicians in countries across the globe are enacting legislative measures that would require corporations to buy emissions permits for every ton of CO2 generated. While this is a great step towards cleaner, more efficient energy usage, it could also further damage the economy by sending energy prices upward, thus hurting consumers. Regardless of the &ldquo;correct&rdquo; view on the existence and severity of global warming, one thing is for certain &mdash; this will continue to affect price levels for years to come.</p> <h2>Drought</h2> <p>Have you ever read John Steinbeck&rsquo;s <em>The Grapes of Wrath</em>? The Dust Bowl of the 1930s &mdash; during which the story takes place &mdash; was more than just fiction. The droughts and unusually high temperatures during the Great Depression negatively affected thousands of farmers and people who couldn&rsquo;t afford the food prices when the supply diminished, and we continue to see these problems persisting to this very day. The Horn of Africa is currently experiencing its <a href="http://www.un.org/apps/news/story.asp?NewsID=39271">worst drought in nearly six decades</a>. Food prices are only making the problem worse for the millions of people in the region, as even staple items such as maize and milk are on the rise. Anyone who has taken an Economics 101 class knows that supply has an inverse relationship with the price of goods, so with less and less food being grown each year, the famine continues to worsen for those who can&rsquo;t afford the surge in <a href="http://www.wisebread.com/how-to-grocery-shop-for-five-on-100-a-week">prices for food</a>.</p> <h2>Torrential Rains</h2> <p>Contrary to a severe dry season, torrential rains can also lead to a terrible supply shock, as seen in the current Norwegian butter crisis. After an uncommonly wet summer season in Norway, the quality of grazing land for the cows diminished, leading to a sharp drop in the availability of this basic dairy good. As with the rest of the supply shortages as seen in other natural disasters listed above, prices have increased for Norwegians who have been waiting weeks for butter imports.</p> <p>Torrential rains can also cause flooding, which generally devalues homes in the area and shuts down <a href="http://www.wisebread.com/choosing-local-businesses">local businesses</a>, economically hurting both the owners and customers in the region.</p> <p>With the Earth&rsquo;s carrying capacity being stretched to its limits, we are bound to see more natural disasters occurring in the future. With natural disasters comes a loss of life, as well as potentially destructive impacts on pricing in countries around the world. Our governments do what they can to alleviate the hazards before a disaster strikes, but the funding and technology in the status quo isn&rsquo;t enough to prevent them from happening. Ultimately, only our mitigation efforts can be the keys to softening the blow when these catastrophes strike.</p> <a href="http://www.wisebread.com/how-natural-disasters-can-change-pricing-worldwide" class="sharethis-link" title="How Natural Disasters Can Change Pricing Worldwide" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kelly-kehoe">Kelly Kehoe</a> of <a href="http://www.wisebread.com/how-natural-disasters-can-change-pricing-worldwide">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. 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